Energy Superpower – or Underachiever?

For decades, energy has preoccupied Canadian policy-makers, from the massive investments in nuclear and hydro energy in the 1960s and 1970s to the more recent focus on fuel-cell technology, renewable energy such as wind and solar, Alberta’s oil sands and the country’s evolving pipeline infrastructure. In fact, energy accounts for seven per cent of the economy and almost a quarter of our exports.

Yet for all the attention, Canada’s record on energy research and development doesn’t exactly burn brightly. Between 2002 and 2011, for example, Canada accounted for just two per cent of the world’s clean-energy patents, trailing far behind the United States (at 49 per cent) and Japan (26 per cent). Even the Ontario government’s recent push to drive investment in solar and wind energy hasn’t provided much of an innovation boost.

So while Canada’s energy R&D spending as a proportion of GDP is second only to Japan’s, there’s much to suggest that we run the risk of falling behind in the race – or marathon – to make the world’s energy system more sustainable. So concludes a new study from U of T’s Mowat Centre for Policy Innovation, “Smarter and Stronger: Taking Charge of Canada’s Energy Technology Future.”

“In order for Canada to become an energy technology leader and an energy superpower,” the report notes, “a clear pan-Canadian energy technology policy is needed. This means that the provincial governments and the federal government would set and follow through on long-term targets [for energy research and development], and deliver effective funding through stable institutions.” The observation is timely, given the Harper government’s bid to restructure Canada’s R&D incentives and programs.

According to the study, written by Mowat energy analyst Tatiana Khanberg, Ottawa and provincial governments need to establish a national framework for energy R&D, create a federal ministry of energy, and do a much better job coordinating the country’s many disjointed programs, policies and research initiatives. The goal should be to increase energy R&D’s share of the national economy. “If you don’t know where you’re going in the long-run, you won’t know how to get there,” says Khanberg.

She cites Finland’s National Innovation System and Alberta’s Oil Sands Technology Research Authority as examples of how governments can create the right conditions for energy research to mature into highly productive commercial activity without falling prey to the so-called “picking-winners” approach that has doomed other publicly funded energy R&D efforts.

Khanberg warns that “pull” measures, such as Ontario’s feed-in tariff incentive for clean energy investors, failed to produce a knowledge dividend. The report concludes that a “direct push” approach to energy R&D, focusing on a broad portfolio of technologies and continuous basic research efforts driven by technical experts, yields the greatest benefit in the long run.